Working parents

The perennial problem facing working parents (and their employers) is how to stretch their annual leave to cover the school summer holidays. While informal childcare from doting relatives can be helpful, it’s not always reliable and formal childcare is expensive. The good news is that state support is improving, although finding what’s available isn’t easy.

The government’s Childcare Choices website is a good resource for finding childcare options. As an employer encourage your employees to use the service. If it benefits them it can help you ensure you have staff cover.

What counts as working?

To qualify for the working incentive schemes, each parent needs to be earning the equivalent of £183.04 per week, i.e. 16 hours at the relevant National Minimum Wage rate, from employment or self-employment. Fluctuating earnings are fine as long as the average over the three-month entitlement period is sufficient. At the other end of the scale, neither parent can have adjusted income (including expected bonuses) of more than £100,000 p.a.

Any parent who has recently started self-employment is exempt from the earnings test for the first year.

Support for young children

From September 2024, working parents in England who have children who are at least nine months old can access 570 free nursery hours p.a. (1,140 free hours from September 2025). For the term after a child turns three, most children of UK working parents are entitled to 1,140 hours per year. To access this support, a special code must be acquired online by the deadlines of 31 August, 31 December or 31 March to be valid for the following term.

All children over three are universally entitled to at least 570 hours each year, whether or not either parent is working. This also applies for certain disadvantaged two year olds.

While free hours are often accessed over 38 weeks (otherwise known as term time), some providers allow the entitlement to be accessed over 51 weeks, i.e. stretched funding.

If the online claim deadline is missed, you’ll have to wait an entire term before you can use your entitlement.

Older children

Tax-free childcare (TFC) has been around several years and provides government aided funding. It comprises an online savings account which is used to pay for approved childcare for each child under twelve. The government pays an incentive; for every 80p put in it adds 20p capped at £500 every quarter.

If you receive tax credits or Universal Credit, you can’t have a TFC account and mustn’t apply for it by mistake if claiming an online code for the free hours, otherwise all of your benefits will stop.